Bloomberg's Pension Mischief

We have been arguing for some time that the argument for a third term for Mike Bloomberg-you know, a tough man for tough economic times-doesn't really hold up under even the slightest independent scrutiny. Bloomberg, imbued with an expansive government propensity-and lacking any real sympathy for the lower tax arguments that most people with a business background imbibed with their mother's milk-has raised cost that are, in the words of our national leader, "unsustainable."

Now, in a really incisive news report, the NY Times exposes the Myth of Mike; a man who has pensioned off the city's fiscal future: "Mayor Michael R. Bloomberg is sounding the alarm over New York City’s pension system these days, calling it “out of control.” Costs have ballooned, he says, threatening to bankrupt the city. Municipal unions and lawmakers in Albany created the crisis, he suggests, and left the city holding the bag. But interviews and budget records show that the Bloomberg administration itself is responsible for much of the growth in city pension costs over the last eight years, and has repeatedly missed opportunities to rein in the spending."

Having missed all of these opportunities is not the only black mark on the Bloomberg fiscal report card. At the same time that he was avoiding making any of the responsible decisions needed to make government more cost-effective, he was simultaneously-adding injury to insult to injury-raising the crippling local taxes that have been a major contributing factor in the city's economic meltdown.

All the while, like some out of work lottery winner, the mayor was thoughtlessly spending Wall Street cash-acting as if the spigot would never be turned off. Some of this-rather unintentionally-is captured by the Times in the following tepid mea culpa from one of the Bloomberg toadies: "Aides to the mayor defend his handling of pension costs. While acknowledging that Mr. Bloomberg has given significant raises, the aides say the weakened stock market has also driven up costs, because the city is forced to cover investment losses in the pension system."

But that, of course, doesn't explain the mayor's instinctive generosity over the years: "Mr. Bloomberg presents himself as a model of financial restraint who has stood up to special interests, like unions, in order to hold down city spending — a claim that is at the heart of his bid for a third term. But financial-watchdog groups say that rather than confronting the city’s pension problem, the mayor has made it worse over the last several years, negotiating costlier payouts for retirees in flush economic times that threaten to be crippling now that the city is in a recession. “You have a mayor who says that pension costs are unsustainable, that they will bankrupt the city, who has willfully increased the city’s pension liabilities,” said Nicole Gelinas, a senior fellow at the conservative-leaning Manhattan Institute who focuses on New York City’s finances."

Bloomberg came into office-unbought and unbossed, to use an old Kochism-with a great opportunity to lower the cost of government through creative reinvention. Instead we got John Vliet Bloomberg-a man that never saw a government program he either didn't like, or want to expand even further; a best friend to all city workers.

Ah, but now he sees the light, after only eight years in office, and is rushing to reinvent-not government-but his own image; and he's got the money to do just that. Here's the NY Post on the teacher pension deal reached yesterday: "The teachers union and Mayor Bloomberg announced a breakthrough deal last night on a pension-reform package that the mayor estimated would save the city $2 billion over 20 years. It was the first significant pension change won by Bloomberg since taking office in 2002 -- and followed a series in The Post that disclosed that some city workers, especially cops and firefighters, were routinely collecting six-figure retirement checks."

So, perhaps Mike Bloomberg-like some other clever pols in the past-is actually running to throw the bum out; making arguments about fiscal restraint that would be less discordant coming from a real mayoral challenger. Even the old excuse that Albany ate my homework, comes off not only lame, but inaccurate as well. As the Times points out: "Over the last seven years, public sector unions have successfully lobbied lawmakers to pass dozens of bills increasing their pension benefits. In most cases, aides to the mayor said, the city has vigorously opposed the measures, to no avail. “Unfortunately, the battle we’ve been fighting over pensions is how to keep them from getting even more generous and expensive,” said Edward Skyler, the deputy mayor who oversees labor negotiations. But the mayor has, in fact, supported legislation that makes pensions more lucrative. Coming into office after the Sept. 11 attack, he backed proposals to increase retirement pay for firefighters and police officers, who receive the city’s biggest pensions"

But all of this butt covering elides the main point-and masks Mike Bloomberg's gross culpability; a guilt that goes to the heart of the mayor's big government love affair: "The mayor’s biggest contribution to pension costs, however, are the raises he has negotiated for city workers." And in response, we get the following whopper from Pie in the Skylar: "Mr. Skyler said the administration has negotiated contracts that have improved productivity and attracted more qualified job candidates. As a result, the city has been able to improve services, he said. “We get our money’s worth,” he said."

This is all beyond laughable, and if any normal incumbent was making this argument, his poll numbers would be Paterson-like. The Times underscores Bloomberg's folly: "But records show that wage increases granted by the Bloomberg administration have outpaced the rate of inflation, and have sent labor costs surging. The Citizens Budget Commission, a municipal watchdog group, has called the raises “generous in both historical and comparative terms.” “It’s pretty simple: If you pay people more, their pensions get bigger,” said Charles M. Brecher, the research director at the commission. “And wages are negotiated by the mayor. This is his call.”

All of this could have been avoided if Mike Bloomberg had the political wisdom and the scones to tackle the municipal gravy train-something he alone, because of his great wealth and self-funded campaigns-could have done with relative impunity. As Fred Siegel tells the Times: "The mayor’s political independence — unlike most politicians, he takes no campaign donations — made him “perfectly situated to impose pension reforms, but he chose to not really even try,” Mr. Siegel said. “That’s the tragedy.”

So, as we go full steam into the upcoming election cycle, we are befogged by an
unprecedented spending storm; a magical mystification tour that is going unrebutted by the supposed challenger. As a result, we have reached a nadir in the city's history-real fiscal irresponsibility caused by an incumbent has thrown the city's financial and business situation into a tailspin but, like the proverbial tree in the forest, not many people are finding out about how it has fallen. Maybe this Times critique will usher in a new trend. For all of our sakes, let's hope so.